The following invention relates to a system and method for tracking employee disclosures and affirmations.
Organizations generally require their employees to abide by a Code of Conduct that governs various aspects of employee behavior within the organization. Typically, each employee must acknowledge and affirm the contents of the organization's Code of Conduct as a condition of employment. Employees typically provide such an affirmation at the time of employment by signing a statement acknowledging that the employee has read the Code of Conduct and will abide by its contents.
In some organizations, aside from the organization's Code of Conduct, employees may have to provide information to comply with various other rules and regulations associated with the operation of the organization. For example, in financial institutions, all employees are typically required to disclose to the institution on a periodic basis information regarding brokerage accounts the employee uses to trade in securities. Also, if the institution is a broker-dealer, employees that are brokers registered with the National Association of Securities Dealers (NASD) are required to periodically update a NASD form U-4 that asks, in part, whether the employee was arrested, involved in an arbitration, filed for bankruptcy or is the subject of an SEC investigation. Employees of a broker-dealer that are not registered brokers are required to periodically update a New York Stock Exchange form RE-3 that requests from the employee a subset of the information that a registered broker is required to provide.
In addition to disclosure requirements resulting from a financial institution's broker -dealer status, some employees may be required to disclose information and affirm certain guidelines as a result of the area within the institution in which the employee works. For example, employees that perform a market making function in Nasdaq over-the-counter securities are required to read and agree to abide by a stipulation and order entered into by several broker-dealers and the Department of Justice. This order, requires employees to abstain from, among other things, fixing prices for any Nasdaq security. Additionally, employees that work in corporate finance must agree to abide by the firm's Corporate Finance Permanent Insiders Policy. This policy places restrictions on the personal securities trades allowed by a corporate finance employee. These restrictions are designed to avoid potential conflicts of interest that may arise where a corporate finance employee buys or sells the securities of a company for which they may possess material non-public information. Furthermore, all employees are generally obligated to disclose any outside directorships, business activities and private investments as these activities may result in conflicts of interest. Aside from the above, employees may be required to provide additional disclosures and affirmations as required by the organization.
The prior art approach of gathering the various affirmations and disclosures from employees typically includes a compliance department sending each employee paper forms that request the desired information and direct the employee to sign a statement acknowledging that employee has read and consents to any relevant rules and regulations. The problem, however, with the prior art approach is that because each employee within the organization is required to disclose information and affirm policies and procedures based on the status of the employee, the status of the organization in which the employee works and the area within the organization in which the employee works, each employee may require different disclosure/affirmation forms. To meet this need, the compliance department either can send all forms to all employees and have each employee fill out only the relevant forms or individually tailor a set of disclosure/affirmation forms for each employee. Either approach is wasteful and time consuming.
Another drawback with the prior art approach is that because for each category of disclosure/affirmation a particular employee may be required by law or organizational policy to disclose/affirm on a periodic basis or by certain times, the compliance department must seek out disclosures/affirmations at different times for different employees in order to meet such time requirements. This places a large burden on compliance department personnel, especially for large organizations. Furthermore, a failure to procure the required disclosures/affirmations may result in penalties being assessed to the organization, in certain circumstances.
Accordingly, it is desirable to provide a more efficient and time-saving system and method for tracking employee disclosures and affirmations.